State’s eminent domain laws unfair to farmers

Julianna Marandola
Posted 4/30/15

How large of a U-Haul truck would one need to successfully move a farm?

Yes, a farm – a full-scale, agricultural business with livestock, crops, irrigation systems, and any number of tools and …

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State’s eminent domain laws unfair to farmers

Posted

How large of a U-Haul truck would one need to successfully move a farm?

Yes, a farm – a full-scale, agricultural business with livestock, crops, irrigation systems, and any number of tools and pieces of equipment. The magnanimity of such a task is almost unfathomable, and it is obviously one that is not often taken up voluntarily. Imagine, though, not only being forced to transport your farm, but also having your future income nullified. Under current Rhode Island eminent domain laws, this is the problematic reality for farmers whose land is seized by the government.

The concept of legal land seizure is rooted in the Eminent Domain Clause of the Fifth Amendment, which grants governments the right to take private land for public use purposes if just compensation is provided. Nationally, there is a general consensus that public use refers to infrastructure, public domain locations, utilities, and the removal of blighted structures.

In the wake of Kelo vs. City of New London, the controversial 2005 court case that opened the floodgates for potential abuse of eminent domain powers, many states rushed to reform their own eminent domain policies. In Rhode Island, the result was the implementation of a safeguard policy explicitly preventing executive agencies, such as the Rhode Island Economic Development Corporation, from seizing private lands for the express purpose of economic development. The reforms were accompanied by the adoption of a 150 percent compensation clause.

For a home or business owner, compensation equal to 150 percent of a property’s real estate value, based on a sliding six-to-12 comparative market value scale, is more than a fair payback. With such a payment, one can easily purchase another house or set up shop in another office or storefront. For the farmer, who is subject to the same eminent domain taking and compensation policies, a 150 percent compensation level does not break even in the long-term.

The eminent domain compensation amount granted for farmland is based solely on physical acreage and incidental fees. It does not account for the productivity, arability, and cash crop value of each acre, leaving farmers with a definite quandary. Farmers lose not only their land, but also the accrued annual income for each year the land is no longer in their ownership.

Consider a typical Rhode Island farm in the USDA’s view: In 2012, the average Rhode Island farm contained approximately 56 acres. Nationally, the average price of hay, one of Rhode Island’s most important crops, sold for approximately $226 per ton, with 1.88 tons produced per acre per year. Using the 2012 national average farm acre price of $2,650, a Rhode Island farmer whose land was seized under eminent domain powers would be entitled to an upfront payment of $222,600. Though it is a fair compensation for the physical land lost, this amount does not come close to compensating the profit lost at a yearly rate. The same farmer would lose $23,793.28 in income per year, for a grand total loss of nearly a half million dollars over a 20-year period.

As advanced as Rhode Island’s eminent domain laws are, they lack differential policy. To be truly fair to all types of landowners, the Rhode Island General Assembly must recognize the inherent differences between agricultural and other entities, as the former must receive fair consideration for lost profit in a way that other, more easily transplanted businesses do not. Farmers have long been the backbone of the United States of America. Rhode Island would do well to act as an example for the rest of the nation and take steps toward full protection of farmers’ rights and revenue.

Julianna Marandola is a senior at La Salle Academy. In the past three years, she has been involved in the La Salle Academy Scholars Program, which has given her the opportunity to perform independent policy research regarding the impact of Rhode Island’s eminent domain policy on the state’s agricultural industry. Her research culminated in a comprehensive report, entitled, “Eminent Domain Policy in Rhode Island: Examining Policy Relationship to the Rhode Island Agricultural Industry and Limitations of Current Law.”

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